Suitable Policy Instruments for Monetary Rules

  • Saranna R. Thornton
  • Published 1998


The performance of different policy instruments is examined in counterfactual simulations using McCallum’s adaptive rule. Three different macroeconomic models are used, respectively, to simulate values of nominal GDP from 1964:Q1–1995:Q4. In comparison with historical, discretionary monetary policy, rules using M2 as the policy instrument produce… (More)


7 Figures and Tables